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Amazon Preps Kindle Customers for Coming e-Book Refunds

I received an interesting email from Amazon this weekend: It turns out that the pending settlement between three of the five publishers accused of colluding with Apple to raise e-book prices is going to result in a nice payout to those who purchased e-books over the past two years.

And according to Amazon, that means I’ll be receiving a refund of up to $1.32 for each e-book I purchased at artificially inflated prices between April 2010 (shortly after the iPad appeared) and May 2012 (when the federal government finally stepped in and sued these companies). The average refund will be 81 cents per book.

“You are entitled to a credit for some of your past e-book purchases as a result of legal settlements between several major e-book publishers and the Attorneys General of most U.S. states and territories, including yours,” the Amazon letter reads. “You do not need to do anything to receive this credit. We will contact you when the credit is applied to your Amazon.com account if the Court approves the settlements in February 2013.”

As you may recall, when Apple entered the e-book market with iBooks and the iPad in early 2010, the average price of new e-books miraculously shot up by up to $5 per title, from an average of $9.99—thank you, Amazon—to about $14.99. I complained about this artificial price hike in February 2010, in Apple Entry into Market Means Higher e-book Prices, noting that “Apple negotiated a coup with the world's biggest publishers … new e-books will sell for at least $12.99 to $14.99,” not the $9.99 price established previously by Amazon.

In April 2012, the US government finally sued Apple and its colluding partners in the publishing industry, accusing them of artificially raising the price of e-books and harming consumers as a result. As I wrote in US Government Files Antitrust Lawsuit Against Apple, three of the five accused publishers caved immediately and offered a settlement, while the other two, and Apple, pretended they did nothing wrong.

In Europe, things have worked out similarly, though in this case even Apple knows the jig is up. At reported in Apple, Publishers Offer to Settle EU e-book Price-Fixing Probe, Apple and four of the publishers have simply given up. They have agreed to no longer collude to prevent Apple’s competitors in the e-book space—Amazon, Barnes & Noble and others—from setting their own prices on e-books.

In the US, we have the DOJ settlement to revel in, and given the action in Europe, one has to think that Apple and the other publishers will do the right thing eventually as well.

“Under the proposed settlements, the publishers will provide funds for a credit that will be applied directly to your Amazon.com account,” the Amazon letter to customers notes. “If the Court approves the settlements, the account credit will appear automatically and can be used to purchase Kindle books or print books. While we will not know the amount of your credit until the Court approves the settlements, the Attorneys General estimate that it will range from $0.30 to $1.32 for every eligible Kindle book that you purchased between April 2010 and May 2012. Alternatively, you may request a check in the amount of your credit.”

“In addition to the account credit, the settlements impose limitations on the publishers’ ability to set e-book prices,” the Amazon letters concludes. “We think these settlements are a big win for customers and look forward to lowering prices on more Kindle books in the future.”

Amen to that.

By the way, I mentioned this letter to my wife. She jokingly said I should purchase an Apple product with the refund then smash it with a hammer. I love my wife, and where her head's at. But I would never spend that money on an Apple product. And let’s be serious: No Apple product is cheap enough to fall into the refund amount I’m going to get anyway: Apple products are really expensive. I’m just happy to no longer be paying their vig on the e-books I purchase from Amazon.